Officials from Ayala Land, the Securities and Exchange Commission, Philippine Dealing & Exchange Corp., and other key agencies gather to celebrate Ayala Land's groundbreaking ₱20.5 billion green financing initiative.
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MAKATI CITY, Philippines — Ayala Land Inc. (ALI) has successfully raised ₱20.5 billion through its Sustainability-Linked Financing (SLF) Program. This funding includes a ₱6 billion Sustainability-Linked Bond (SL-Bond) and a ₱14.5 billion Sustainability-Linked Loan (SL-Loan) from the International Finance Corporation (IFC). This is the first initiative of its kind in the Philippine real estate sector.
Meean Dy, President and CEO of ALI, said, "This landmark investment drives our efforts in portfolio decarbonization, reinforcing our commitment to a greener property sector in the Philippines."
The SLF Program ties ALI's financial goals to its environmental targets. The interest rates of the SL-Bond and SL-Loan depend on ALI’s performance in reducing emissions and achieving green certifications. If targets are not met, interest rates on the loan will increase by up to 10 basis points.
What is an SL-Bond?
Sustainability-linked bonds are bonds where the terms can change based on whether the issuer meets certain environmental, social, or governance (ESG) goals. Issuers promise to improve their sustainability performance by specific deadlines, making these bonds focused on future results.
The ₱6 billion SL-Bond has a 10-year term and is the first of its kind offered publicly in the Philippines. Antonio Nakpil, President and CEO of Philippine Dealing & Exchange Corp. (PDEX), praised ALI for this initiative and its paperless issuance process, saying, "In keeping its ESG-focused mentality, we understand that this is also the first fully paperless issuance by a Philippine corporation and kudos to ALI, again, for saving more trees and showing the digital way forward."
SEC Commissioner McJill Bryant Fernandez also commended ALI, stating, “This move strongly demonstrates your commitment to create long-term economic, environmental, and social value for your stakeholders. This milestone is not only a significant achievement for the company, but more importantly, for the country as it represents charting new paths for sustainable finance in the Philippines."
What is an SL-Loan?
Likewise, the interest rates or other terms of an SL-Loan can change based on degree of compliance to ESG targets.
The ₱14.5 billion SL-Loan from IFC is ALI's first loan from a multilateral agency and IFC's first sustainability-linked loan for a Philippine company. This loan will support ALI’s efforts to reduce carbon emissions and implement green building initiatives, including energy and water-saving measures, including efficient lighting, cooling systems, passive building design, low-flow water fixtures, and water recycling systems.
Jean-Marc Arbogast, IFC Country Manager for the Philippines, praised ALI’s leadership in sustainability, stating, "Ayala Land is a leader in sustainability in the Philippine property sector. We are proud to support this landmark investment, which we hope will inspire other industry players to join the green building movement."
A Pioneering Approach
Ayala Land's SLF Framework meets international standards, including the ASEAN Sustainability-Linked Bond Standards (ASEAN SLBS), the Sustainability Linked Bond Principles (SLBP), and the Sustainability Linked Loan Principles (SLLP).
The ASEAN Capital Markets Forum (ACMF) created the ASEAN Sustainability-Linked Bond Standards (ASEAN SLBS) to help fund companies that support sustainability. These standards improve clarity and consistency for sustainability-linked bonds, create a new investment category, lower due diligence costs, and help investors make better decisions.
ALI’s CFO, Augusto D. Bengzon, reflected on the company’s sustainability journey, stating, "In 2007, Ayala Land formalized sustainability as a guiding principle in land use and development. A year after in 2008, Ayala Land issued the first listed bond in the Philippine Dealing & Exchange Corp. As we look back, we cannot help but feel a sense of awe how these two seemingly unrelated events have now intertwined as we come together this morning to list ALI’s P6 billion 10-year issue as the Philippine capital market’s first ASEAN Sustainability-Linked Bond.”
Management Committee Members and Executives of Ayala Land, Inc., Securities and Exchange Commission, Philippine Dealing & Exchange Corp., Philippine Depository & Trust Corp., and Joint Lead Underwriters attended the event.
